RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:They think we are stupid...babedinkleman wrote: It seems difficult to comprehend that you are ok with this deal Jay considering you are always pushing for dividend raises. As you suggest.....diluting shareholders 11.57%.....in addition to $30-40 million? in debt with interest rates going up and they stick shareholders with a dividend raise of half a cent? Huh? Something just doesn't add up. They are looking at increased income of $8 million a year and paying out $700,000 of that to shareholders and payout ratio barely drops? It's like I'm in the twilight zone where everyone is insane but me....LOL.
Bullshiit about opening up the U.S. or not this is by far the worst deal they have ever made......and I've been around for them all. I figured they were looking at a big name franchise in the U.S. that would make the company.....not a janitorial service flying high on the back of covid as we may be moving into a recession.
JayBanks wrote: With the new announcement the dilution is 11.57%
I've had the same thinkings about what exactly we are buying, it really only mentions the Molly Maid type service directly, but is sounds like there is more involved (hopefully we hear more eventually). Also I believe that the funding we are giving to acquire the royalty would likely be used for expansion of the company we purchased which in turn is a + for us.
I think the deal seems a little expensive now, but the yearly multiplyers and the wording seems like we get a bonus payment should the company achieve certain growth numbers. For the next 4 years we get royalty increases of 5% and then 4% for what it seems like 46 years after if I understand it correctly. With most of our other holdings we are getting like 2% or less increases yearly from what I remember seeing.
I'm on the fence about what this is and can do, but I don't really mind the deal. Numbers are what I'm interested, I would like to see this put some on the board but it might be close to 6-9 months before we see results and a year or 2 before we get a real good grasp on this.
Anouther thing to look at outside what this deal is, would be the fact that we have gone more international with the deal and somewhat widened the idea of what we could get royalties on.
I don't think it's the worst deal. Mr.Mikes, Nurse Next Door, and Oxford weren't that different from an amount of money invested vs return ratio. I do agree may not be the greatest business though. You mentioned Alaris, which had a partner called Kimco in the same field, commercial office cleaning etc all across the United States although I'm not sure about the franchising aspect. If not for the pandemic they would have gone bankrupt. Covid saved their bacon, and in turn Alaris' investment in them. So it is worth noting that recent numbers may not be a totally accurate representation of the commercial cleaning business moving forward longer term. I'm currently out of the stock but may get back in if it pulls back some more. That dividend increase was rather lame imo.